Oracle, Sun ready to lift veil on merger plans

SAN JOSE, Calif.  Oracle and Sun Microsystems will discuss their plans for the combined company Wednesday (Jan 27) just four days after the European Commission approved the merger. The event will officially end uncertainty since the $7.4 billion deal was announced April 20, and should answer a range of questions about the future of the company's microprocessors, systems, software—and staff.

The deal was the first of many consolidation efforts in 2009 in an ongoing trend to selling business computers and networks at greater levels of integration.

Cisco Systems in March added servers to its product line of switches and routers. Hewlett-Packard bid to acquire 3Com in November to boost its communications offerings, and Microsoft and HP formed an alliance earlier this month on cloud computing systems and services.

Just by holding the event, the duo ends months of crippling uncertainty in the face of a recession. Indeed, Sun was forced to cut 3,000 workers in October.

"For the last nine months because Sun has been in this limbo, so it's been hard for them to sell anything--who wants to be the last person to buy something from Sun if the deal falls apart, asked Nathan Brookwood, principal of market watcher Insight64 (Saratoga, Calif.). "So many customers have been pried away by aggressive marketing programs from IBM, HP and Dell," he said.

Now the combined companies need to end further uncertainty about the future of Sun's Sparc microprocessor. Analysts sounded the death knell for the company's high-end Rock processor in early April when its chief architect Marc Tremblay left Sun for Microsoft.

Sun has kept its aggressively multicore Niagara line humming with the announcement in August at Hot Chips of its latest member, Rainbow Falls. Partner Fujitsu discussed an eight-core Sparc chip at the same event.

Sun will lose customers if it doesn't continue the Sparc line with a respectable road map, said Brookwood. Making a transition to the x86 "would throw a huge monkey wrench into IT shops" despite the fact Sun's Solaris operating system is available for both CPUs, he added.

The combined company also needs to reinvigorate its leadership after the loss of several top talents including Tremblay, co-founder Andy Bechtolsheim and Sparc group executive David Yen.

"I suspect there have been a number of key employees who departed at lower levels," said Brookwood. "You would have to be really dedicated to stay" through the nine month merger approval, he added.

It is also unclear if Oracle which is focused on business computing will continue to fund Sun's drive into high-performance systems for technical applications including massive Infiniband switches built under Bechtolsheim, said Brookwood.

In software, Oracle needs to send a clear message about the future of Java which Sun has leveraged into use in everything from computer servers to cable TV set-top boxes and cellphones. In the storage field, Oracle needs to decide how it will leverage Sun's novel file system.

The Oracle event promises to handle all those topics including the roll out of new servers, storage and networking systems and software. However, given the combined companies have only had four days to officially begin detailed products planning discussions, a scratch under the surface may show the answers are still preliminary.

A Wall Street Journal article said Oracle will hire 2,000 more people as part of the merger and focus on high-end Sparc, not low-end x86 based systems.